U.S. investors who are wondering what to expect in 2014 are looking beyond our borders to the global economy. The leader of PIMCO’s cyclical economic forums, Saumil Parikh, shares his insights on the pace of recovery in the overseas markets. Here at home, market analysts aren’t sure the Federal Reserve will be able to successfully exit from its quantitative easing program. What effect will this have on interest rates in 2014? Jeffrey Gundlach of Doubleline Capital offers his assessment in Advisor Perspectives. Liz Ann Sonders of Charles Schwab thinks one of the best ways to forecast 2014 is to look back to the 1990s. Her commentary this week explains why the past may be a prologue for the coming months.
PIMCO Cyclical Outlook: A Steady Passage In 2014- PIMCO believes the global economy will likely experience steady, broad-based growth in 2014. This is thanks in no small part to the extraordinary expansion in central bank balance sheets in 2013. Rising asset prices in combination with fading near-term fiscal uncertainties will drive global aggregate demand growth forward. This should add stability to what has thus far been an on-again, off-again global recovery from the financial crisis of 2008. http://www.pimco.com/EN/Insights/Pages/PIMCO-Cyclical-Outlook-A-Steady-Passage-in-2014.aspx
Gundlach – Rates Will Remain Low In 2014– Slowing economic growth, low inflation and a lack of motivated sellers will keep interest rates depressed, at least for the rest of this year. This is according to Jeffrey Gundlach, founder and Chief Investment Officer at Doubleline Capital. But investors should prepare for an eventual rise in rates, he said, because he is skeptical of the Federal Reserve’s ability to successfully exit from QE. http://advisorperspectives.com/newsletters14/Gundlach-Rates_Will_Remain_Low_in_2014.php
Objects In The Rear View Mirror May Appear Closer Than They Are: A Look Back At The 1990s- Liz Ann Sonders, Chief Investment Strategist at Schwab, compares the current economic and market environment to the 1990s. She says, “In sum, although there are differences, there are many more similarities between today and the mid-1990s in terms of both the economic and market cycles. It’s a signal we are likely in the more mature phase of both; a phase when individual investor participation heats up and when the economy more clearly moves from recovery to expansion.” http://www.schwab.com/public/schwab/nn/articles/Objects-in-the-Rear-View-Mirror-May-Appear-Closer-Than-They-Are?requrl=/public/schwab/resource_center/expert_insight
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John R. Day, Bill Ennis, Stephanie Davidson and Matt Heller